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Right now, diesel is more expensive than gasoline. This is normal for this time of year – busy shipping season for christmas gifts, harvest time, refineries gearing up to produce heating oil – and quite a bit different than previously in the year. At one point #2 ULSD was over $1/gallon cheaper than 87 octane unleaded gasoline.

But, folks have a hard time getting over this “diesel is more expensive than gasoline” stigma. Why they can’t do the math is beyond me, but here is an illustrative example.

I just filled up my 2006 VW Golf TDI at approximately the same mileage at which I would have to fill up my previous vehicle, a 1995 Volvo 850. I will use the lowest observed prices for both #2 ULSD and 87 Octane RUG and the overall fuel economy calculated over several thousand miles for both vehicles.

1995 Volvo 850: overall 26.3 mpg fuel economy

2006 VW Golf TDI: overall 43.4 mpg fuel economy

The lowest observed price today is $2.739 RUG; $2.899 ULSD. At these prices, the 850 would have cost 10.4 cents per mile for fuel. The Golf TDI costs 6.7 cents per mile for fuel. Even at $3.234/gallon for the AWOC B11 I normally fill up with (at least often enough to maintain a minimum of B2 in the tank at all times), the Golf TDI would still only cost 7.5 cents per gallon.

Keeping the Volvo would cost at least 2.9 cents more per mile, or 38.7% more than the Golf. Not to mention the two grand in work it needed immediately… and a car with 160k miles on it is going to start requiring regular replacement of non-trivial parts.

Remember folks, the price at the pump is irrelevant, what matters is the cost per mile.

Oh, and the Golf has gone 800 miles on a single tank. The Volvo did well to go 500 miles on a tank… a tank that was at least 3 gallons larger. 38.7% more per mile in fuel sounds pretty bad right now, and that’s with diesel that’s 50 cents per gallon more than gasoline. Just imagine what it would be like this summer when ULSD was a steady $2.999/gal and RUG was at $4.039/gal – actual prices I observed. (hint: the Volvo would then cost over twice per mile in fuel than the Golf… 122% more expensive)